Cash flow confusion can make a busy, high-producing practice feel like it has no money left at the end of the month. In this episode, Kirk Behrendt explains why production and a “profitable” P&L don’t always translate into cash in the bank, and he brings in coach Robyn Theisen to break down the cash flow gap.

You’ll learn the difference between net profit and actual cash available, the three common places cash disappears, and which financial statements you need to see the full story and build a plan for taxes, debt, and owner compensation. Listen to Episode 1053 of The Best Practices Show!

Main Takeaways:

• Net profit on the P&L is not the same as cash in the bank.
• The cash flow gap is the difference between what your P&L shows and the cash actually available.
• Cash commonly disappears in three places that don’t show clearly on the P&L: taxes, debt payments, and owner draws/distributions.
• Interest expense may appear on the P&L even when the actual loan payments and balances aren’t being tracked.
• To understand where the money went, you need to review the P&L, cash flow statement, and balance sheet together.
• Predictable owner compensation, tax reserves, and a debt strategy reduce reactive decisions and stabilize cash flow.
• Ongoing monthly accountability and review are necessary to keep cash flow clean, especially in multi-owner practices.

Snippets:

00:00 Net profit versus cash in the bank.

06:00 What the cash flow gap is and where it usually shows up.

07:00 Why paying down debt doesn’t appear on the P&L.

10:00 The three strategies: tax reserves, debt strategy, and owner compensation.

11:00 The three financial statements needed to understand cash movement and what’s owed.

15:00 Why multi-owner practices add complexity and require consistent monthly review.

17:00 The cash flow statement tells the full story, not the P&L.

18:00 BPA tools mentioned: reading the three statements, Financial Gaps at a Glance, and the calculator.

Guest Bio/Guest Resources:

Robyn Theisen brings an entire life and legacy of dental experience to the team and every team with which she works as the daughter and sister of dentists. With almost 20 years of experience in dentistry, her roles ranged from practice management to operations at Patterson Dental to coaching teams. Robyn’s passion is empowering teams to realize that they can dramatically impact the lives of the people they serve by implementing skills and systems to remove barriers to life-changing dental treatment. She has done it for decades and does it every day with dental teams.

Outside of coaching, she enjoys time with her husband, Rob, and two daughters, Emerson and Ruby. She loves traveling, music, fitness, and cheering on the Michigan State Spartans.

Resources Mentioned:

Financial Gaps at a Glance: https://www.actdental.com/gaps-at-a-glance

Financial Gaps Calculator: https://www.actdental.com/gaps-calculator

More Helpful Links for a Better Practice & a Better Life:

The Best Practices Show: https://www.actdental.com/podcast/

Best Practices Association: https://www.actdental.com/bpa

Upcoming Events & Workshops: https://www.actdental.com/events/

Smile Source: https://www.smilesource.com/

Subscribe on Apple Podcasts: https://podcasts.apple.com

Subscribe on Spotify: https://open.spotify.com